Leave it to Doctor Demming!

If you’ve been in the accounting industry for longer than 20 years you get to know the beurocratic system, both its strengths and weaknesses. CRA does NOT operate using the same business “rules” that the public is exposed to. In fact the rules that CRA plays by are: written by themselves, are written for their benefit, and is subject to change without consultation with the public (whom they are designed to “serve”). It can very well be a frustrating industry, not unlike trucking who must work with the DOT.

In the last twelve months our office has recorded a HUGE increase in CRA errors. Our numbers show triple digit increases. In our specific experience we have nailed it down to data entry. CRA has made significantly more data entry errors than we have EVER experienced before. We have attributed some of the errors to their “new system” which was launched early last year (ie. GST-ITC checks stopped due to late or incomplete data). I personally am not against the new system as it relates to late filers. In fact some aspects of the system I am very comfortable with. However, some things are getting out of hand.

Here is just one example. One of our clients sent in a check for $1400 in source deductions. The check cleared the bank with the appropriate deposit information on the reverse (Revenue Canada DID receive and deposit it). Under the “re” the appropriate RP number was clear. The appropriate amount was placed on the source deduction form (submitted). However, the amount was not applied to the source deduction account. In fact it didn’t appear ANYWHERE! In fact they are still looking for it. In talking with the client I have to communicate it will take 2-6 months to have CRA adjust it correctly. Meanwhile T4’s and T4 summaries are all submitted as “balanced” and yet CRA numbers disagree. Not until the file is given to someone who has authority to investigate and correct will it be rectified (hence the 2-6 months). Meanwhile the “request for payments” pile up, interst, penalties etc.

When CRA data keys errors the system operates as a punishment to innocent tax payers. The process of correcting CRA errors is brutal! As I stated, under most situations it takes four to six months to correct CRA blunders (or anyone’s blunders for that matter). That kind of correction would NEVER pass in the real world. The only reason it is tolerated is because of a lack of competition (maybe we can get Bosnia administer our taxes). Performance evaluation is balanced by a “systemic” approach to implementation, which means that the “system” comes first. Then, when and if there is time service!

Dr. Edward Demming is my hero (as anyone who reads my blogs knows). He states that people are restricted from excelling at their work because of the system! Bang on Dr.!